Bank of Canada Set to Hold Rates, Then Hike Later This Year: TD Securities

The Bank of Canada's next policy rate decision is expected in early 2025, and TD Securities analysts project that it will maintain its current policy rate before implementing a hike later in the year.

The forecast cites persistent underlying inflation and a resilient domestic economy as key factors behind the 'hold then higher' call. The central bank will likely prioritize data confirmation over a rapid easing cycle to balance cooling headline inflation against sticky core price pressures.

Market expectations suggest a split among investors, with some anticipating a rate cut by mid-2025, but TD Securities argues that the Bank of Canada will be forced to respond to a rebound in economic activity driven by strong population growth and government spending.